Market report: Exuberance gives way to exasperation by the close

SHARES remain unsettled. A lacklustre New York opening, a moderately encouraging gilts auction and disappointing figures from National Westminster Bank combined to kill off hopes of a telling comeback.

At one time the FT-SE 100 index was 21.3 points higher and seemingly set for a strong performance. But by the close the gain had been cut to 8.2 at 3,341.9, as exuberance was replaced by exasperation.

The pounds 2.5bn gilts auction was covered 1.48 times. The outcome was greeted with relief because before the result was announced rumours were swirling that it had been an embarrassing flop. The cover was, however, an improvement on last month's 1.21. Government stocks were unimpressed, ending slightly easier.

The interest rate cloud continues to create uncertainty. More talk of continental reductions had to be squared with indications from Alan Greenspan, Federal Reserve chairman, that US rates could edge a little higher.

For the first time in the present downturn there appeared to be determined selling. But the volume was not high, although market turnover at 822.4 million was the best this week. A pounds 30m buy-and- sell programme, embracing such stocks as Sears and Siebe, and a number of special situations helped volume to balloon.

NatWest fell 28.5p to 503.5p, a level that prompted Salomon Brothers to suggest the shares were a buy. Profits were disappointing. But it was the lower- than-expected dividend that hurt. Others were dragged lower. Abbey National fell 5p to 507p; Barclays 10p to 564p and Standard Chartered 24p to 1,260p. But Lloyds attracted support, up 15p at 599p.

British Aerospace, with at least six securities houses recommending the shares following the results, was at one time up 22p. The shares closed at 549p, a 9p gain.

Rank Organisation fell 4p to 1,083p as shareholders approved the share split. Tottenham Hotspur lost 10p to 82p on the figures.

Vodafone, the mobile telephone group, gave up 3p to 602p. There was talk of a US presentation and some were looking for an acquisition.

British Airways fell 7p to 465p with rumours flying that a big US house had downgraded. Grand Metropolitan, on the other hand, was helped by US influences with, it is thought, Goldman Sachs making positive noises. The shares gained 12p to 461p.

Tate & Lyle eased 5p to 425p with Kleinwort Benson offering take-profits advice.

Carr's Milling Industries had a lively session, climbing 12p to 209p. The flurry followed the disclosure that Northern Foods had sold its 4.75 per cent shareholding. Northern had at one time nursed takeover ambitions and the market decided Northern had retreated in favour of Dalgety.

It is unclear whether Dalgety has acquired the Northern shares but the rumour was enough to lower the pet and snack food group 10p to 467p.

Bernard Matthews, the Norfolk group famed for its 'bootiful' turkey products, toddled 5.5p to 113p, highest for more than a year, and a two-day gain of 14p.

The group, which late last year took over one of its main rivals, is thought to be trading well and next month's profits could top pounds 11m against a depressed pounds 3.3m. There is talk that Bernard Matthews, the chairman and creator, could be prepared to ease his grip. He has a 37.24 per cent interest.

Mosaic Investments, where the former chief David Williams has staged a comeback, made further headway, up 5p at 32p.

Tring International made a powerful debut. Placed at 118p, the shares closed at 139p.

Europe Energy rose 2.5p to 16p following a trading pact with Coal Investments, suspended at 76p two weeks ago while talks took place with British Coal about mine acquisitions.

Essex Furniture, following results, rose a further 10p to 281p, a peak.

Radio shares were again inspired by the trading outlook and the continuing bid speculation. Scottish Radio improved 36p to 626p; GWR 12p to 1,030p.

Plysu, the plastic container group, held at 249p. Smith New Court expects profits to slump from pounds 10.8m to pounds 7m in the year ending next month because Bowater's challenge has driven down prices and disrupted the market.

But the securities house is looking for pounds 11.5m next year.

Action at Chloride, the once famous battery maker transforming itself into an electronics group. The Swedish SSA & Partners sold its 20 per cent stake through Smith New Court at about 32p. The Swedes, in the shape of an investment company called Mercurius, paid varying prices and may have emerged with a small profit. Chloride rose 0.25p to 32.5p.

Hunters Armley, the commercial printer that came to the market 15 months ago, jumped 15p to 223p following an upbeat trading statement by David Bird, chairman, at the yearly meeting in Leeds. The shares were floated at 90p. Last year profits hit pounds 2.7m and stockbroker Panmure Gordon is looking for pounds 3.1m this year. Next year's estimate is pounds 3.7m.

Interest is building in Bardon, the aggregates group that used to be known as Evered Bardon. There is a wide spread of forecasts, ranging from profits of pounds 17m to a loss of pounds 46m, with write-offs creating the disparity. But in the current year there are hopes that 'clean' profits could emerge at pounds 30m. The shares, occasionally ruffled by takeover talk, fell 2p to 55p.

The FT-SE 100 index closed below its best, up 8.2 points to 3,341.9. The supporting FT-SE 250 index rose 6 to 3,974.9. Turnover was 822.4 million shares with 29,342 deals. The account ends tomorrow and settlement is on 7 March.

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